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Broad Based Commodities Strong, Precious Metals Continue Correction

 December 12, 2010 01:58 PM


Last week, precious metals (DBP) (SLV) (GLD) were under selling pressure. Given their strong performance in the past several months, this isn't unexpected. This coincided with the price loss of long term bonds (treasury and investment grade corporate) - an unusual correlation. In a bigger context, we view these as normal corrections.

Agriculture commodities (DBA) have been going up steadily. Industrial base metals were also strong. Energy markets had a big recovery last week, especially for natural gas (UNG). All these boded well with general rising stock markets (especially the U.S. stocks).

As a result, broad based commodities (DBC, GSG) are doing well, continuing their up trend.

Assets ClassSymbols12/08
Trend
Score
12/01
Trend
Score
Direction
SilverSLV32.56%33.3%v
AgricultureDBA12.54%10.55%^
Precious MetalsDBP12.32%12.65%v
Base MetalsDBB10.09%5.97%^
CommodityDBC9.76%8.02%^
GoldGLD8.21%8.33%v
US OilUSO6.8%4.62%^
EnergyDBE6.62%4.17%^
Natural GasUNG-7.66%-11.41%^

[Related -Gold Loses Its Appeal Fast]

[Related -Buck The Crowd With These Gold ETFs]

Click to enlarge graphics

For more information, please visit MyPlanIQ 360 Degree Market View.

In conclusion, with the looming inflation and U.S. dollar weakness, commodities can be used as a hedge in a portfolio. Precious metals and agriculture commodities are favorable.

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